Interest rates for July, impacting retirees collecting their BP RAP benefits on November 1st, 2022, moved mostly in-line with our estimates for rates to be slightly changed from June’s figures. Please keep in mind that June’s figures showed an exceptionally large increase from previous levels. Currently, electing to take November 1st is the most advantageous month and, based on our estimates, waiting until December to file for your benefits will offer little to no additional value from your BP RAP account.
The Federal Reserve continues to loudly signal that they are “committed” to combating inflation and will take whatever measures necessary to bring it under control. However, the Fed has shown little ability to follow through with these actions. Last year, the Fed repeatedly stated that inflation was “transitory” – meaning short-lived. In reality, inflation was here to stay and hit a 40-year high at 9.1% last month. Now we are being told we should expect a “soft-landing” – meaning that our economy will avoid recession and slow down just enough. Given most Americans believe we are already in a recession, the current statement by the Fed is hard to find without skepticism. We anticipate that the US economy will slowly weaken over the course of the next several quarters as the Fed is forced to keep increasing interest rates and reducing the supply of money in the economy. This will likely translate to bond rates continuing to increase as we approach the end of 2022.
If our assumption is correct, any small decline in rates should be considered an opportunity for you to collect your pension. If you are considering retiring this year or next, we cannot underscore the importance of getting professional advice during this highly volatile time. Choosing the wrong month to collect your retiree benefits could cost you thousands of dollars. Our team at Capstone Wealth Advisors specializes in knowing the innerworkings of your BP Retirement Plans and how to help you make the decision that best suits your individual situation.
If you would like to learn more about how your pension is impacted by interest rates or if you are concerned at the overall situation of financial markets today, please do not hesitate to contact one of our experienced financial advisors who specializes in knowing the inner working of your BP RAP plan. This service is free of charge for all BP Employees and Retirees.
To schedule a complimentary consultation with our team email firstname.lastname@example.org or call us directly at (877)739-6007.
Capstone Wealth Advisors
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